What does competition normally establish in a source selection?

• A. Price minimization
• B. Technical excellence only
• C. Best value without considering price
• D. Price reasonableness; cost analysis may be needed in limited cases

Answer: (D)

Competition provides a market check on price, letting the agency compare offers to determine price reasonableness. In many competitive procurements, price analysis alone can show that proposed prices are reasonable, and the presence of multiple bidders helps ensure this. However, in some situations—such as with cost-type contracts or unusual cost structures—a more detailed cost analysis may be needed to verify that proposed costs are allocable, allowable, and reasonable. The goal isn’t price minimization or focusing on technical excellence alone; it’s achieving best value with a reasonable price. That's why the correct view is that competition normally establishes price reasonableness, with cost analysis used in limited cases.